April 5 (Bloomberg) -- Ukraine Prime Minister Arseniy
Yatsenyuk at a government meeting today said Russia’s plan to
raise the natural gas price by 80 percent to what he called the
highest price in Europe is “aggression against Ukraine.”

Yatsenyuk said Ukraine was ready to pay off its debt to OAO
Gazprom and that the first quarter gas price was acceptable.
Russia canceled discounts it offered to Kiev on April 1, raising
the price to $485 per 1,000 cubic meters from $268.50, and has
threatened to cut off supplies if Ukraine doesn’t pay its $2.2
billion debt.

Ukraine relies on Gazprom for half its gas, while carrying
about 15 percent of European supplies through its pipelines from
Russia, making it a linchpin in the continent’s energy security.
Ousted President Viktor Yanukovych won a lower price at the end
of last year by ditching an association agreement with the
European Union, leading to protests that resulted in his flight
to Russia. The new government in Kiev has since signed political
parts of the EU deal.

“Apart from the Russian army and guns, they decided to use
one of the most efficient tools, which are political and
economic pressure,” Yatsenyuk said.

Stockholm Appeal

Ukraine will appeal to an arbitration court in Stockholm if
it fails to reach an agreement with Russia on the gas price,
Energy Minister Yuri Prodan told reporters today in Kiev.

Ukraine will continue to fulfill its transit obligations on
gas shipments to Europe if Russia cuts supplies to Ukraine,
Prodan said.

Prodan will travel to Brussels on April 8 for talks over
Ukraine’s plans to import gas from the EU, Yatsenyuk said,
adding that Ukraine is considering partnering with EU and U.S.
investors to modernize and manage the country’s gas pipeline
network.

Ukraine, which seeks to import 20 billion cubic meters of
gas a year from Europe, is currently importing 20 million cubic
meters a day, Prodan said.

Yesterday, Gazprom spokesman Sergei Kupriyanov said the
company will fulfill its contractual obligations and continue
shipments if it receives payment for past supplies. Kiev’s draft
budget last month was based on a Russian gas price of about $480
per 1,000 cubic meters, he said.